Scottish House Condition Survey: Key Findings 2011

The Scottish House Condition Survey (SHCS) combines both an interview with occupants and a physical inspection of dwellings to build up a picture of Scotland’s occupied housing stock. This is the eighth ‘Key Findings’ report since the SHCS changed to a continuous format in 2003.


4 Fuel Poverty

82. The term 'Fuel Poverty' refers to the situation where a household cannot afford to heat their home to an adequate level. The Scottish Government uses the following definition of fuel poverty as set out in the Scottish Fuel Poverty Statement (FPS)[16] published in 2002:

"A household is in fuel poverty if it would be required to spend more than 10% of its income (including Housing Benefit or Income Support for Mortgage Interest) on all household fuel use."

The Scottish Government have pledged to ensure that by November 2016, so far as is reasonably practicable, people are not living in fuel poverty in Scotland.

83. Furthermore 'Extreme Fuel Poverty' is defined as a household having to spend more than 20% of its income on fuel.

84. Fuel poverty statistics are based on a model that calculates the cost of heating a dwelling according to a specified temperature regime and mid-year fuel prices. For a more detailed description of the definition of fuel poverty and analysis of previous years' SHCS fuel poverty statistics see the Fuel Poverty Statement, the SHCS 2002 Fuel Poverty in Scotland Report[17] and the SHCS Fuel Poverty Report 2003/4[18]. A technical note on the calculation of Fuel Poverty figures using SHCS data can be found on the SHCS website[19].

85. An extensive review of the evidence on fuel poverty based on the SHCS data to 2010 is available from the Scottish Government website[20]. In it we provide further analysis of the factors driving fuel poverty, a detailed profile of the fuel poor, and examine alternative definitions mooted by the Hills Review of Fuel Poverty[21].

86. In each of the eight continuous survey years there were a number of cases where it was not possible to determine fuel poverty status. These have been apportioned on a pro-rata basis between the two categories (or three categories in the case of extreme fuel poverty) as was discussed in the 2004/5 SHCS Key Findings Report[22]. 73 'missing' cases were reapportioned in 2011. Households with negative annual household income after council tax deduction are removed from the fuel poverty calculations but reapportioned in this way.

4.1 Trends and Drivers

87. Figure 9 and Table 23 show fuel poverty rates from 2002. The number of fuel poor households and the fuel poverty rate include those in extreme fuel poverty.

88. Latest figures for 2011 are shown with respect to two sets of fuel prices: mid-year July 2011, in line with previous annual statistics and for October 2011, showing the effects of large fuel price rises in the autumn of 2011. For more information see page 16.

89. From 2002 levels (293,000 or 13%) fuel poverty increased to a peak in 2009 (770,000 or 33%). Rates then decreased for 2 years between 2009 and July 2011, to a level of 582,000 households (25%). Following the sharp fuel price increases in autumn 2011, fuel poverty increased to 684,000 (29%) in October 2011.

90. Trends in the number and percentage of households in extreme fuel poverty follow a very similar pattern, with the latest estimate of 185,000 (8%) in October 2011.

Table 23 Fuel poverty and extreme fuel poverty 1996-2011 (000s and %)

Year Fuel poverty Extreme fuel poverty
000's % 000's %
2002 293 13.4 71 3.2
2003/4 350 15.4 112 4.9
2004/5 419 18.2 119 5.2
2005/6 543 23.5 173 7.5
2007 586 25.3 172 7.4
2008 618 26.5 182 7.8
2009 770 32.7 243 10.3
2010 658 27.9 185 7.8
2011 (July Price) 582 24.6 153 6.4
2011 (Oct Price) 684 28.9 185 7.8

Source: SHCS 1996, 2002 and Continuous SHCS 2003/4 - 2011

Figure 9 Households in fuel poverty 1996-2011 (%)

Figure 9 Households in fuel poverty 1996-2011 (%)

Source: SHCS 1996, 2002 and Continuous SHCS

91. The 3 main factors driving changes fuel poverty rates are fuel prices, income and energy efficiency of the home[23].

4.1.1 Fuel Prices

92. Table 24 shows the change in the 3 main fuel prices between May 1996 and July 2012 against changes in fuel poverty. This table includes an average fuel price figure weighted by the proportion of households using each of those fuels for their home heating as recorded by the SHCS.

93. Since 2003/4, fuel poverty rates have been estimated based on mid-year fuel prices. Due to a steep fuel price rise in autumn 2011 we have included additional estimates at this higher rate. Figure 10 shows how fuel prices moved on a quarterly basis since 2003.[24]

Table 24 Retail Price Index fuel components, May 1996 to June 2012

Fuel price index numbers relative to the GDP deflator
Year % Fuel poor Gas Electricity Heating oils Weighted
average
2002 13.4 86.0 91.1 67.1 83.3
2004 15.4 88.4 91.9 79.4 85.9
2005 18.2 97.3 98.4 91.0 94.4
2006 23.5 126.5 117.7 115.1 121.1
2007 25.3 130.2 122.9 107.8 127.2
2008 26.5 142.9 134.5 187.5 145.3
2009 32.7 173.8 141.4 107.0 162.7
2010 27.9 158.9 137.0 137.1 153.9
July 2011 24.6 164.5 139.0 171.8 161.5
Oct 2011 28.9 191.0 152.1 168.8 183.5
2012 186.0 146.7 159.7 178.1

Source: Continuous SHCS; DECC RPI Fuel Components[25]

Figure 10 RPI fuel price components from 2003 relative to the GDP deflator

Figure 10 RPI fuel price components from 2003 relative to the GDP deflator

Source: DECC RPI Fuel Components, Continuous SHCS

94. These figures show that, in general, between 2002 and 2009 fuel prices and fuel poverty rose in parallel. Between 2009 and 2010 fuel prices for all fuels except heating oils dipped, which is reflected in a fall in fuel poverty rates.

95. In July 2011, although the fuel price index swung back towards 2009 levels, there was no equivalent rise in fuel poverty. Until early autumn this was partly due to the disproportionate burden borne by users of other fuels, who saw a 34 point increase, compared to gas and electricity users (6 and 2 point increases respectively).

96. The autumn 2011 price rises were more widely distributed and include a 27 point increase in the cost of gas from July; a far more commonly used fuel. As a result, fuel poverty rates increased in October 2011.

4.1.2 Income and Energy Efficiency

97. Trends in fuel price and fuel poverty levels are shown alongside corresponding changes in income and energy efficiency in Figure 11[26].

98. The SHCS samples drawn in 2010 and 2011 show an increase in average household income over this period, with the mean annual household income increasing from £23,000 to £24,500 and the median growing from £18,100 to £19,600[27]. This increase is seen right across the income distribution. The estimated level of fuel poverty is primarily affected by changes in the bottom half of the distribution.

99. It is important to recognise some limitations to the income information collected in the SHCS. It covers net income from all sources for the highest income householder and his or her partner. It will therefore underestimate total income in households where more than 2 adults receive income from some source. This affects disproportionately the upper half of the distribution.[28] The data collection methods and design of the survey are not geared to the production of the most robust estimates of household income change and because of incomplete income information some imputation of income components is usually undertaken[29].

100. The examination of measures of central tendency shows that for the last decade the SHCS median has tracked well data from the Family Resources Survey (FRS), the official source for household income information, except for the period 2007 - 2009 where it showed slight reductions compared to the increase that would be expected in line with FRS trends.

Table 25 Change in mean annual income by income decile group, 2010-2011

Income Decile Group Year Percentage Change
2010 2011
1 5,400 6,100 13%
2 9,300 9,900 6%
3 11,900 12,500 4%
4 14,400 15,000 4%
5 16,800 18,100 8%
6 20,000 21,600 8%
7 24,600 26,100 6%
8 30,900 32,100 4%
9 39,400 40,400 2%
10 60,900 63,000 4%
All 23,300 24,500 5%

Source: Continuous SHCS

101. As shown in Chapter 3, and alongside other fuel poverty drivers in Figure 11, we have seen continuing improvement in energy efficiency upgrades of the housing stock.

Figure 11 Fuel Poverty by energy efficiency and indexed fuel price and median income

Figure 11 Fuel Poverty by energy efficiency and indexed fuel price and median income

Source: Continuous SHCS; DECC RPI Fuel Components

102. To understand the contribution of household income and the improvement of the energy efficiency of the housing stock we attempted to simulate the changes experienced between 2010 and 2011 separately for each set of factors and examined the resulting changes in the estimated level of fuel poverty. We used data from the 2010 and 2011 SHCS and, because each of those represents a fresh sample from the dwellings population of Scotland, our estimates will contain noise arising from sampling variation and should only be seen as an approximation for this particular combination of prices, energy efficiency and income levels. Annex A describes the methodology and results from this exercise, which are also illustrated in Figure 12.

103. There was a reduction in the estimated level of fuel poverty of 76,000 or 3.4% of households between 2010 and July 2011. The conclusion from our simulation is that:

  • an increase in average household income contributed a 2.5 percentage points decrease in fuel poverty rates;
  • improvements in the energy efficiency of housing contributed a 1.7 percentage points decrease in fuel poverty rates, and
  • increases in fuel prices contributed a 0.8 percentage points increase in fuel poverty rates.

104. The corresponding analysis between 2010 and October 2011, when there was an increase in the estimated level of fuel poverty of 26,000 or 1% of households showed:

  • income growth contributed a 2.2 percentage points decrease in fuel poverty rates;
  • energy efficiency improvements contributed a 1.5 percentage points decrease in fuel poverty rates; and
  • increases in fuel prices led to a 4.7 percentage points increase in fuel poverty rates.

105. Overall, our simulation found that for the period between 2010 and 2011 the growth in household income and the improvements in energy efficiency effectively contained the growth of fuel poverty against price increases up until the early autumn of 2011 when there was a step change in the price of fuel. Only about 80 per cent of the latest price increase could be offset by income growth and housing stock improvements, and the rate of fuel poverty went up. Around 60 percent of the offsetting effect was due to household income and around 40 percent can be attributed to changes in the housing stock, at least some of which will constitute energy efficiency upgrades.

Figure 12 Price, income and energy efficiency effects on fuel poverty rate

Figure 12 Price, income and energy efficiency effects on fuel poverty rate

Source: SHCS 2010, SHCS 2011

4.2 Fuel Poverty, Dwelling and Household Attributes

106. The relative distribution of fuel poverty in 2011 remained very similar to previous years. The reduction in the prevalence of fuel poverty to July 2011 benefitted disproportionately lower income groups: those with weekly incomes below £300 and residents of social housing. These gains were reversed in the autumn and by October 2011 levels had returned close to those experienced in 2010. Groups who seem to have done consistently badly throughout 2011 include households living in higher council tax band properties (Bands F & G), those in dwellings rated 'poor' on the NHER scale and large families (although from a very low base). (Table 26 to Table 29)

107. Detached properties remain the most likely to suffer fuel poverty (157,000 or 33% by October prices). However, whereas in 2010 tenement flats and terraced houses had similar levels of fuel poverty (25%), the latter did not benefit from the reductions to July 2011 (tenements dropped 4 points) and both suffered from the subsequent rise to October. This put 30% of terraced dwelling occupants (141,000) into fuel poverty (Table 26 & Table 27).

108. Inter-war dwellings did not see a reduction in July 2011 but suffered a 5 point increase from 2010 to October 2011. This means that buildings from 1919-1944 are just as likely to be fuel poor as pre-1919 dwellings at 34% (153,000 pre-1919 and 106,000 from 1919-1944) (Table 26 & Table 27).

Figure 13 Fuel poverty rates by selected household and dwelling characteristics (%), 2010 and July and October fuel prices 2011.

Figure 13 Fuel poverty rates by selected household and dwelling characteristics (%), 2010 and July and October fuel prices 2011.

Source: SHCS 2010-11

109. Pre-1919 dwellings are still more likely to be in extreme fuel poverty. In October 2011, almost twice as many were extreme fuel poor as for 1919-1944 constructions (52,000 or 12% compared with 27,000 or 9%).

110. This change, alongside a rise in fuel poverty in dwellings built between 1965 and 1982, means that the age dependency seen in previous year breaks down somewhat, with the exception of post-1982 dwelling which continue to perform well. This is likely a result of higher building standards in new buildings which require a minimum energy efficiency (Table 26,Table 27 and Figure 13).

111. Across-the-board price rises to October 2011 meant that changes in fuel poverty were relatively evenly spread. Oil users remain most likely to be fuel poor (50%) and gas-users least (26%) (Table 28).

112. As we might expect, dwellings with lower energy efficiency were more likely to be fuel poor. Households with a poor NHER rating increased in fuel poverty when there was a general downwards trend between 2010 and July 2011. This increase continued through October 2011, resulting in a 8 percentage point increase overall to 48,000 or 66% of households (Table 26, Table 27 and Figure 13).

Table 26 Fuel Poverty by dwelling characteristics (000s)

July 2011 Prices October 2011 Prices Total Sample size
Not Fuel Poor Fuel Poor Extreme Fuel Poor Not Fuel Poor Fuel Poor Extreme Fuel Poor
Type of Dwelling
Detached 350 157 67 340 166 73 506 779
Semi detached 376 117 22 350 143 29 493 687
Terraced 419 141 31 391 169 39 560 772
Tenement 407 106 18 386 127 26 512 530
Other flats 235 62 15 218 79 19 297 378
Age of Dwelling
Pre-1919 313 135 44 295 153 52 448 564
1919-1944 214 94 22 202 106 27 308 420
1945-1964 393 138 34 363 167 42 530 740
1965-1982 420 150 34 385 186 43 571 754
Post-1982 446 65 19 439 71 20 511 668
Extent of Central Heating
Full 1,714 538 138 1617 635 168 2,252 2,995
Partial 57 24 7 54 27 8 82 110
None 15 20 8 13 21 9 34 40
Primary Heating Fuel
Gas 1,461 397 89 1383 476 108 1,858 2,311
Oil 76 64 25 70 70 29 140 276
Electric 215 102 33 195 122 44 317 470
Other 33 19 6 36 16 4 52 88
NHER Band
Poor 28 45 22 25 48 27 73 134
Moderate 484 273 93 448 309 106 757 1,095
Good 1,274 263 39 1211 327 52 1,537 1,917
Urban/rural
Urban 1,530 446 107 1441 536 131 1,977 2,451
Rural 256 136 46 244 147 54 391 695
Mains Gas Grid
Not on gas grid 126 85 32 120 91 37 211 470
On gas grid 1,658 496 120 1562 592 148 2,154 2,673
All Scotland 1,786 582 153 1050 684 129 2,368 3,146

Source: SHCS 2011

Table 27 Fuel poverty rate by dwelling characteristics (Row %)

2010 Jul-11 Oct-11 2011 Sample
Type of Dwelling
Detached 34 31 33 779
Semi detached 28 24 29 687
Terraced 25 25 30 772
Tenement 25 21 25 530
Other flats 28 21 27 378
Age of Dwelling
Pre-1919 35 30 34 564
1919-1944 29 31 34 420
1945-1964 31 26 31 740
1965-1982 28 26 33 754
Post-1982 17 13 14 668
Extent of Central Heating
Full 28 24 28 2,995
Partial 36 30 33 110
None 33 57 62 40
Primary Heating Fuel
Gas 25 21 26 2,311
Oil 45 45 50 276
Electric 37 32 38 470
Other 38 36 30 88
NHER Band
Poor 58 62 66 134
Moderate 40 36 41 1,095
Good 20 17 21 1,917
Urban/rural
Urban 26 23 27 2,451
Rural 38 35 38 695
Mains Gas Grid
Not on gas grid 45 40 43 470
On gas grid 26 23 27 2,673
All Scotland 28 26 29 3,146

Source: SHCS 2011

113. By tenure, fuel price rises in October 2011 had the smallest effect on Housing Association and private-rented households compared with 2010 levels. Both saw a three percentage point decrease in fuel poverty from 2010 to 26% for Housing Associations and 24% for private rented (Table 29). Local Authority households remain the most likely to be fuel poor at 33% followed by owner-occupied dwellings at 29%.

114. While most household types saw a fuel poverty reduction to June 2011, large families gained four percentage points on 2010 levels (7% to 11%), reaching 13% in October 2011 (21,000 households).

115. Pensioners households and single adults remain the most vulnerable to fuel poverty. 56% of single pensioners were fuel poor in October 2011, 40% of older smaller households and 39% of single adult households. Pensioner households accounted for 55% of the fuel poor in total (377,000) (Table 28 and Table 29).

116. After a 3 percentage point drop to July 2011, single adult fuel poverty rose again by 7 points to 39% in October 2011 (132,000 households).

117. As expected, there remains a clear correlation between income and fuel poverty. Fuel poverty reductions to July 2011 favoured the lower income groups, however those earning less than £100 per week are modelled to spend such a high proportion of their income on fuel that there was no significant effect. Those earning £100 to £200 and £200 to £300 per week saw a 2 and 6 percentage point reduction respectively, however the October 2011 fuel price increases hit them hardest (7 and 10 point increase), negating any advantage and leading to a net increase (Table 29).

Table 28 Fuel Poverty by household characteristics (000s)

July 2011 Prices October 2011 Prices Total Sample size
Not Fuel Poor Fuel Poor Extreme Fuel Poor Not Fuel Poor Fuel Poor Extreme Fuel Poor
Tenure
Owner-occupier 1,101 381 113 1050 433 129 1,483 2,022
LA/other public 263 89 17 236 115 23 352 461
HA/co-op 217 55 6 201 71 12 272 346
Private-rented 204 57 16 198 63 20 261 317
Private Sector 1,306 438 129 1247 497 150 1,744 2,339
Social Sector 481 144 23 437 187 35 624 807
Household Type
Single adult 232 109 31 209 132 37 341 429
Small adult 349 42 9 338 53 12 391 495
Single parent 86 26 4 79 33 4 112 151
Small family 319 22 4 315 26 6 341 440
Large family 143 17 6 139 21 9 160 217
Large adult 198 34 9 190 42 11 232 328
Older smaller 283 140 34 254 169 39 423 587
Single pensioner 177 192 55 161 208 67 369 499
Weekly Income Band
< £100 p.w. 1 51 38 - 52 42 52 65
£100 -199.99 p.w. 65 268 76 41 291 96 333 444
£200 -299.99 p.w. 333 159 28 285 207 30 492 652
£300 -399.99 p.w. 318 55 8 304 70 11 373 483
£400 -499.99 p.w. 253 21 1 246 28 4 274 366
£500 -699.99 p.w. 369 19 2 366 22 3 388 541
£700+ 447 9 - 443 14 - 457 595
Council Tax Band
A 347 136 29 318 165 33 482 653
B 447 151 28 418 180 41 598 783
C 296 80 23 278 98 26 376 531
D 227 57 14 219 65 18 284 368
E 250 69 23 241 77 27 319 419
F 123 44 14 118 50 16 167 218
G 80 36 17 76 40 18 116 135
H - - - - - - 8 11
Unobtainable - - - - - - 19 28
All Scotland 1,786 582 153 1684 684 185 2,368 3,146

Source: SHCS 2011

118. While council tax band remains a poor indicator of fuel poverty, F- and G-band dwellings saw consistent increases in fuel poverty between 2010 and July 2011 while others improved. By October 2011 these groups had gained 7 percentage points in fuel poverty since 2010 (from 71,000 in 2010 to 90,000 in October 2011).

Table 29 Fuel poverty by households characteristics (Row %)

2010 Jul-11 Oct-11 2011 Sample
Tenure
Owner-occupier 27 26 29 2,022
LA/other public 32 25 33 461
HA/co-op 29 20 26 346
Private-rented 27 22 24 317
Private Sector 27 25 28 2,339
Social Sector 30 23 30 807
Household Type
Single adult 35 32 39 429
Small adult 15 11 14 495
Single parent 31 23 29 151
Small family 6 6 8 440
Large family 7 11 13 217
Large adult 20 15 18 328
Older smaller 40 33 40 587
Single pensioner 55 52 56 499
Weekly Income Band
< £100 p.w. 98 98 100 65
£100 -199.99 p.w. 83 81 88 444
£200 -299.99 p.w. 38 32 42 652
£300 -399.99 p.w. 15 15 19 483
£400 -499.99 p.w. 7 8 10 366
£500 -699.99 p.w. 4 5 6 541
£700+ 2 2 3 595
Council Tax Band
A 33 28 34 653
B 25 25 30 783
C 26 21 26 531
D 25 20 23 368
E 31 22 24 419
F 23 26 30 218
G 27 31 34 135
H - - - 11
Unobtainable - - - 28
All Scotland 28 25 29 3,146

Source: SHCS 2011

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